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4 Lessons Entrepreneurs Can Learn From WhatsApp's Acquisition

When messaging app WhatsApp was acquired last week by Facebook for $19B, shockwaves rippled through Silicon Valley. It was the largest tech deal since Time WarnerTime Warner’s $124 billion merger with AOLAOL in 2001, and many questioned why Facebook would spend so much of its cash – and stock – on WhatsApp. While the motives of Zuckerberg’s move still aren’t quite clear, it’s obvious that, at the least, Facebook wanted both WhatsApp’s users and its team on Facebook’s side. It’s an unlikely swan song story for Silicon Valley – but entrepreneurs everywhere can still takeaway a few key lessons from the acquisition in hopes of acheiving the same type of success.

1. Press Doesn’t Matter

Judging by the number of pitches I receive in my inbox every morning, I’m well aware that startups will do practically anything for press. While it’s unethical to get paid to write about a startup, almost every journalist has been pitched over a glass of wine or over dinner. If every app approached the press about every new feature, new hire or new version – and needed to wine and dine a journalist to ensure coverage – there wouldn’t be any time to actually develop the product.

WhatsApp inherently knew this, and instead of focusing on press coverage focused on building a great app that got traction by word of mouth. In fact, excluding the press coverage from the acquisition, WhatsApp has just fewer than 200 press mentions – and barely got any coverage until 2011 (two years after it launched.) Clearly, getting covered – even by the big tech blogs – isn’t a prerequisite to getting a big deal.

2. No Marketing? No Problem

Many startups – especially those in the mobile industry, developing apps – believe that in order to acquire users you must devote a significant chunk of time and money into user acquisition. How else are you going to rise the ranks of the app store without banner ads and leveraging social media channels to drive downloads and engage users, thereby eventually growing organically?

WhatsApp demonstrated that you can actually acquire users – and keep them engaged – with a marketing budget of $0. By creating an app that simply solved a problem facing millions of users internationally, the founders were able to create traction organically. This traction – and market penetration – was not only a success for WhatsApp, but was appealing enough for another company to acquire them.

3. You Don’t Need To Go Big To Go Home

Another mistake many startups make – especially after they take funding – is unnecessarily growing the company to “scale” it. At the time of WhatsApp’s acquisition, the company only had 55 employees — 32 of whom are engineers. This is obviously a tiny team, but operating lean has allowed them to focus on creating a reliable, low-latency service that processes 50 billion messages every day across 7 platforms. Instead of dedicating time and resources to constantly hiring and onboarding, the team focused on building a great product; a strategy that obviously paid off.

4. Embrace Rejection

It might have been the costliest mistake that Facebook ever made – but it ended up turning WhatsApp cofounder Brian Action into a billionaire. In August 2009, he applied for a job with Facebook but was rejected. As he tweeted back then, “It was a great opportunity to connect with some fantastic people. Looking forward to life’s next adventure.” (Action also applied for a job with Twitter just a few months prior and was also turned down.) Instead of throwing in the towel and giving up on his dreams of working on a product that would change people’s lives, Action partnered with co-founder Jan Koum to build WhatsApp and spent the next four years developing the app. It’s an important lesson – and perhaps the most important to take away from WhatsApp’s acquisition: keep focused on your goals and dreams, even in the face of setbacks and rejection.

If you’re an entrepreneur, you may never strike a deal as rich as the founders of WhatsApp. However, by taking a look at how the founders of WhatsApp ultimately became acquired by Facebook, you may find the motivation to achieve your own version of success, however you define that.

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